The Simple (but Effective!) Way New Graduates Can Prep for Their Financial Futures

Feeling major post-college cash woes? You’re not alone. Nearly 70 percent of students are stressed about their finances, according to a 2015 Ohio State University survey. But whether you’re comfortably employed or still on the job hunt, every new grad could benefit from some financial hints taken straight from the experts. (Looking for a job? Make sure to avoid these resume mistakes!)

Thanks to Mental Floss, we have the inside scoop, and it will solve all of your fiscal anxieties. They teamed up with Discover to answer your most pressing queries and reveal their top money saving tips.

Although you always hear that it’s never too early to start socking money away for retirement, it’s not clear how much should you be saving. Mental Floss advises using the 50/30/20 rule: 50 percent of what you earn covers essentials like rent, utilities, food, transportation, insurance, and loan payments; 30 percent pays for personal, discretionary spending; and 20 percent goes to savings and debt repayments.

Now, let’s break down that 20 percent of savings even further. First, many financial experts recommend stashing away three to six months’ worth of expenses into a savings account, creating a buffer for emergencies like losing your job or needing to repair your home or car. To do that, simply calculate your monthly cost of living—minus a few luxuries—and divide that number in half. Saving that amount monthly will give you a six-month emergency fund by the end of the year, guaranteed!

You can also start contributing to your 401K plan—or, if you aren’t provided one by your company, you should open an individual retirement account. According to Mental Floss, “time is the name of the game here. The sooner you start earning interest, the sooner that interest starts earning interest.” They say that you should aim to save at least 10 to 15 percent of your pre-tax income in your 401k. Although that may seem intimidating at first, check to see if your employer matches your contribution. If so, you only need to save 5 percent; the company’s match will cover the rest. Piece of cake!

Finally, use your savings to start paying off loans or debts. And if you have extra cash left over, try to make additional payments. It will get you out of the hole much faster!

All in all, keep in mind that everyone’s financial situation is different. These are only guidelines and recommendations—not steadfast rules, Mental Floss says. Just take a deep breath and pat yourself on the back if you can even get dinner on the table; it’s what successful people do every night, so you might not be doing too bad in the real world, after all.

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